Spreadsheet risks and how to avoid them

6th Aug 2019
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Computerised spreadsheets have been around for decades and have continued to evolve with the development of technology. The way people use spreadsheets has also changed over time. Excel was once a simple record-keeping tool but now people use it to perform complex analyses and present data in various formats. This level of complexity lends itself to a number of risks.

But what are these risks and how can you avoid them?

Lack of training

Everybody should be trained to use spreadsheets. A lack of training will lead to poor spreadsheets with improper referencing and inaccurate formulas, which will result in unreliable outputs. Remember: Excel training isn't just for beginners! You need to make sure you're constantly developing your skills in Excel.

Lack of guidelines

If your organisation's guidelines on spreadsheet preparation and presentation are inadequate, errors will become more common and there will be a lack of consistency amongst spreadsheets created by different employees. Organisations should set out rules on spreadsheet style, content and accountability in their policies and procedures, and produce a best practice guide for spreadsheet preparation.

Reused spreadsheets

Spreadsheets are often passed down and reused within a company. After cutting and pasting, spreadsheets may not be as robust as they were originally. Formulas can be damaged or even overwritten, and links can be broken. It's worth bearing this in mind.

Human error

We are all human, right? We all chat with colleagues, take breaks and check our mobile phones. These distractions are common causes of data entry errors (such as skipped entries and transposed numbers). Try not to get distracted in the middle of an Excel task!

Loss of data

As with any other software, failure to back up and save spreadsheets may result in the loss of hours of data entry. Make sure you regularly save and back up your spreadsheets. It is easier to retrieve information from a backup file than to redo the entire spreadsheet.


Spreadsheet fraud has led to the demise of many companies and institutes – the collapse of the Jamaican banking system in the late 1990s, for example. When auditing a spreadsheet, you should make sure you know the signs of potential fraudulent activity. A company's actual figures may have been replaced with false values, etc.

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